For-profit regulation could survive Senate vote, sources say

Many of the country’s largest online colleges still could be subject to the Obama administration’s regulations on for-profit schools, despite a vote by the Republican-controlled House of Representatives to stop any attempt to enforce the proposed rules.

House Republicans, along with more than 50 Democrats, passed an amendment Feb. 18 that would block the U.S. Education Department (ED) from using funds to initiate “gainful employment” regulations on for-profit colleges—including the University of Phoenix and other large online-learning institutions.

However, the Democratic-controlled Senate isn’t likely to approve the defunding of “gainful employment” rules, according to sources familiar with Capitol Hill negotiations on the matter. The sources said they would only speak to eCampus News anonymously because senators are still deciding how the for-profit amendment will be handled in a Senate vote.

Under “gainful employment,” for-profit colleges such as Kaplan University and the University of Phoenix would have to prove their students are able to find employment and repay their loans.

Failure to abide by the rules would result in a loss of federal funding, which is the primary source of income at many for-profit schools. For-profit colleges take in more than $140 billion annually in federal aid, according to government statistics.

Even if the House version of the for-profit rules passes in the Senate, organizations that have pushed for “gainful employment” believe President Obama will veto the measure, sources said.